Committee Supports Texas Insurance Fraud Legislation

March 14, 2005

Six bills strengthening the fight against insurance fraud were filed in the Texas House of Representatives. The legislation includes everything from reporting fraud to enhancing penalties for insurance fraud where someone has been killed or injured.

The legislation was filed by State Rep. Larry Taylor of Friendswood. The legislation has the support of the Texas Committee on Insurance Fraud, a group consisting of almost 100 representatives from the insurance industry, consumer groups, state and county government, as well as Texas and national anti-fraud organizations who share a common goal in fighting insurance fraud.

“The Committee has prioritized this legislation as the first steps needed in bringing insurance fraud under control in Texas,” said Craig Sparks, chairman of the Texas Committee on Insurance Fraud and president of Union Standard Insurance Company. “Every dollar that we can keep out of the hands of criminals can be returned to Texas consumers through lower rates insurance rates. It’s happening in other states and it can happen here.”

HB 3373 would make it mandatory for insurers to report cases of insurance fraud to the Texas Department of Insurance. The legislation would assist state lawmakers in assessing the impact of insurance fraud in Texas.

Other legislation includes extending the statute of limitations on cases of insurance fraud from three to five years. Cases of insurance fraud that place a person at risk of death or serious injury would become a first-degree felony. Anyone who solicits individuals to be a part of a staged auto accident scheme could face a third degree felony charge.

Howard Goldblatt, director of government relations with the Coalition Against Insurance Fraud headquartered in Washington, D.C., said the move to strengthen the state’s anti-fraud efforts is a positive step. “It’s been a long time coming for Texas to take a stand against insurance fraud,” said Goldblatt. “Consumers will greatly benefit if the legislature passes strong fraud laws backed by dedicated enforcement and prosecution.”

The Texas Committee on Insurance Fraud seeks ways to expand the state’s fraud fighting capabilities through public education, by enhancing communication and cooperation among fraud-fighting organizations and proposing legislation to strengthen existing laws.

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